BILL NUMBER: AB 1870	CHAPTERED  09/24/00

	CHAPTER   605
	FILED WITH SECRETARY OF STATE   SEPTEMBER 24, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 23, 2000
	PASSED THE ASSEMBLY   AUGUST 31, 2000
	PASSED THE SENATE   AUGUST 30, 2000
	AMENDED IN SENATE   AUGUST 29, 2000
	AMENDED IN SENATE   JUNE 15, 2000
	AMENDED IN ASSEMBLY   MAY 31, 2000
	AMENDED IN ASSEMBLY   APRIL 25, 2000

INTRODUCED BY   Assembly Member Davis

                        FEBRUARY 10, 2000

   An act to amend Sections 15339.2 and 15339.3 of, and to add
Section 15339.8 to, the Government Code, relating to small business.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1870, Davis.   Small business funding.
   The Business Incubation Program Act establishes the Business
Incubation Program, pursuant to which grants may be awarded by the
Trade and Commerce Agency's Office of Small Business to assist in the
development of, and delivery of services to small businesses by,
business incubators.  A "business incubator" is defined for these
purposes as an entity that facilitates the formation and growth of
new small businesses to increase their probability of success through
the provision or sharing of specified types of equipment, services,
and facilities.
   This bill would include specified types of activities and services
within the definition of "business incubator" for purposes of the
program.  It would require that programs and services provided
through the program be flexible and responsive to the needs of small
business, as specified.  It would additionally require the office,
when awarding grants, to give highest priority to proposals matching
each state dollar requested with at least one dollar in private or
nonstate public resources, either cash or in-kind.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 15339.2 of the Government Code is amended to
read:
   15339.2.  For purposes of this chapter, the following definitions
apply:
   (a) "Incubator" means an entity that facilitates the formation and
growth of new small businesses to increase their probability of
success through the provision or sharing of needed equipment,
services, and facilities, including at least six of the following:
   (1) Reception and meeting areas, secretarial services, accounting
and bookkeeping services, and research libraries.
   (2) Onsite financial, management, marketing, business development,
and technical counseling.
   (3) Office furniture rentals and flexible lease arrangements for
business sites or for necessary equipment.
   (4) Technology and computing assistance.
   (5) Entry criteria and a graduation or exit policy.
   (6) Provision of, or reasonable access to, debt or equity
financing for client companies as a component of the incubator's
programs.
   (7) Regional collaboration, as appropriate, among facility-based
incubators, virtual, e-commerce, technology incubation systems, and
existing economic and business development programs, to meet the
ongoing demands to support development of micro and small business
enterprises for community economic development.
   (8) A comprehensive entrepreneurial program of services offered by
one or more facility-based or virtual incubation centers or business
enterprise centers.
   (b) "Office" means the Office of Small Business within the Trade
and Commerce Agency.
  SEC. 2.  Section 15339.3 of the Government Code is amended to read:

   15339.3.  (a) The Office of Small Business shall award grants to
California nonprofit corporations or public agencies pursuant to the
application process described in this section.
   (b) In developing the applications for grants, the office shall
consult with incubators and other interested parties to ensure that
the application is understandable and is disseminated as widely as
possible.
   (c) Grant funds shall be encumbered no later than one year from
the date they become available to the agency for this purpose.
   (d) The grants shall be awarded to the proposals scoring the
highest points, based upon criteria that shall include the following:

   (1) Priority shall be given to proposals that provide maximum debt
or equity funding to small businesses that receive services pursuant
to Section 15339.2 from a California incubator.  The office shall
give consideration to applicants that leverage the state funds with
funds from other sources used to provide funding to the incubator
businesses. The office shall give highest priority to proposals
matching each state dollar requested with at least one dollar in
private or nonstate public resources, either cash or in-kind.
   (2) Consideration shall also be given to proposals that enable the
formation and development of incubators.
   (e) Grant awardees shall provide the office with suitable
financial records to ensure their financial viability, and after
receiving the grant, shall allow the office to audit the records of
the expenditure of grant funds.
   (f) The Office of Small Business shall evaluate the Business
Incubation Program and present its findings to the Legislature on a
biennial basis, commencing January 1, 2000.  This evaluation shall
include, but shall not be limited to, identifying the number of
applicants for available grants, the number of incubators assisted
through the program, the number of small businesses assisted, the
graduation rate of businesses out of incubators, and the number of
jobs created and their mean wage level, and identifying the
four-digit Standard Industrial Classification (SIC) code for
businesses in incubators partially financed by the office.  The
evaluation shall be completed within the existing resources of the
office. The office may consult with industry representatives,
incubator associations, and the California Research Bureau while
developing the biennial evaluation.
  SEC. 3.  Section 15339.8 is added to the Government Code, to read:

   15339.8.  Programs and services provided pursuant to this article
shall be flexible and responsive to the needs of small businesses
identified through the regional planning process described in this
article.  Services shall be demand-driven, and delivery structures
shall be in accordance with best business practices,
performance-oriented, and cost-effective, and contribute to regional
and statewide economy growth and competitiveness.
